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specificity into:
-generalized factors ( the transport and communications system, banking system,
educated and motivated labor ) that can be used in many industries, being available in
many countries;
-specialized factors(high skilled labor, special infrastructure ) located into a limited
number of economic sectors. Their creation supposes bigger investments with a bigger
level of risk, starting from the existence of the generalized factors. They are rare but
critical for creating and maintaining different forms of competitive advantages.
B. The determinants of the demand have an important role for creating
competitive advantages. They influence the aquirement of the competitive advantage by
the mix of the domestic demand. The nations win the competitive advantage if the
domestic demand is so strong that forces the companies to innovate more rapidly than
the foreign competitors in order to stay on the market. Porter identifies three features of
the domestic demand which influence the aquirement of the competitive advantage:
- the structure of the domestic market which determines the quality level of the
goods;
- severe domestic buyers with sofisticated needs;
- anticipatory needs of the domestic buyers.
In the case of a big country with big domestic market the development is
stimulated and investments for large-scaled production of the goods can be made, while
in the case of a small country with reduced domestic market, the only chance to reach a
scale economy is to become international.
The domestic market can develop the competitive advantages by internationalizing
the domestic demand and the distribution of the national products abroad. When among
the buyers are foreigners, no matter if occasional buyers ( tourists or bussinessmen ) or
permanent buyers ( the subsidiaries of the foreign trans-national companies ) and their
needs are severe, this fact determines the national companies to improve their goods.
The conclusion is that the domestic market, by its features can determine the
aquirement of the competitive advantage. But itsinfluence depends on the other
determinants of the diamond.
C. Up and downstream industries are another determinant in obtaining the
competitive advantage, if they have a strong position on the international market. O
country can become more competitive, if it has a more concentrated and specialized
horizontal and vertical industry, that can bring a plus of information, of innovation, but
the same as in the case of the determinants of the demand, the influence of the links
among the industry branches on the growth of the international productivity and
consequently on obtaining the competitive advantage depends on the other determinants
of the diamond.
D. The strategy and structure of the company and the rivalry among them is
the fourth determinant of the diamond that influence the international competitivity of a
country by the way which the companies are organized and managed in, by the
proposed objectives and the applied strategies. Of course, there are differences among
the countries regarding the instruction level, the objectives, the working style and the
managers` approaches.
The goals and strategies depend on the form of ownership, the motivation of the
owners and on the stimulation of the managers. Essential for the competitive advantage
is the coordination of the company` goals with those of the owners, shareholders,
managers.
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primary factors of production. In this stage, the economy of the country is sensitive to
the world economic cycles and fluctuation of the exchange rates that determine the
demand and the relative prices.
In the next stage, of the growth based on investments, the national competitive
advantage is based on the desire and capacity of a country and its companies to invest
in major way.
In the third stage, of the growth based on innovations, the competitive advantages
of the country come not only from adapting and improving the technologies and new
fabrication methods, but especially from creating new ones. These stages of the
competitive economic growth include the continuous improvment of the competitive
advantages and are associated with the permanent growth of the economic prosperity.
Unlike these stages, the stage of the economic growth based on the national wealth
is a stage that leads to decline eventually.
An economy based on a wealth realized in
the past can not maintain itself, because the motivation of the investors, managers,
individuals is changed in other directions which subminate the sustained investments
and innovations. The goals are others, including the social goals, which have now more
priority compared to the goals which supported the economic progress.
The countries cross these stages one by one, as a rule, but it is not excluded certain
stages to be subpressed or to be prolonged more ( Fota Constantin, 2004 ).
4. The loss of the competitive advantage
The aquirement of the competitive advantage supposes in an equal way the
appearance of the risk to loose it. Porter declares that the national advantage is lost
when the national diamond stimulates no longer the innovation and investments in
the direction in which the market evolves, and the industries have no longer a correct
perception of the demand.
Porter investigated and analyzed which developments lead to loosing the
competitive advantage at the national level:
- the damage of the factorial determinants;
- the needs inside the country do not correspond anymore with the global demand;
- the domestic buyers have no more sophisticated needs compared to the foreign
buyers;
- the technological changes lead to considerable disadvantages regarding the
specific factors or the supporting sectors deprive ( for example the shortage of human
capital, inefficient or inexistent infrastructure );
- the goals limit the investment rate;
- the companies loose their flexibility;
- the competition on the domestic market decreased ( for example to much
concentration, governmental intervetions to protect the competitors which are not
competitive );
- deterioration of the competing environment;
- the appearance of certain unforeseeable situations that affect fundamentaly the
political and economic stability ( chance for other competitors ).
As any other theory, even the theory of the competitive advantage has adherents
and opponents. Among the critics brought this theory we enumerate the ones regarding
an insufficient substantiation of the concept of competitive advantage and the confusion
beetween the companies and nation. Beyond these critics, the theory of the competitive
advantage comes in a moment, in which, the model of comparative advantages
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corresponds no more the economic reality and blasts hope to the countries remained
behind in the economic competition. Thus, if the theory of Ricardo were strictly related
to the existence of the production factors ( see the many critics brought the theory of
comparative advantage related to underdevelopment of many countries rich in natural
resources), the theory of Porter gives a new foundation for the industrial and
commercial policy. It remains yet to be seen which countries or companies will find the
best solutions to create and maintain the competitive advantage and will succeed so to
go further on the way of economic progress and wealth, considering the present
conditions of regionalizing and globalizing.
REFERENCES
1. Fota Constantin (2004) - Economie internaional , Ed. Scrisul Romnesc,
Craiova;
2. Negrioiu Miu (1997) - Salt nainte, Ed. Pro i Ed. Expert, Bucureti;
3. Porter M.E. (1990) - The competitive advantage of the nations, Ed. The Free
Press, A Division of MacMillan Press Ltd., New York.
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